Good news is on the horizon for buyers and sellers with regard to open and expired permits!
Having a permit and lien search done on a home that you are buying is an important step in your due diligence process. It is important to know what work has been done to the home, but more importantly, that any work done on the property was done with the appropriate permits. Every so often, a permit search completed in the closing process will reveal an open or expired permit tied to the property. Sometimes a property owner has no idea that an open or expired permit even existed because the permit was for work that was performed prior to the present owner taking title to the property. This could happen for a number of reasons, but usually, because the owner did not have a permit or lien search performed at the time of the property was purchased.
An open or expired permit gets closed out when the work has been completed, and an inspection has been performed by the appropriate governmental authorities to verify that all work was completed properly and in compliance with all applicable code requirements. Sometimes, a permit that is opened gets forgotten about and can then exist in the background as an open permit for years before being discovered, usually at the most inconvenient time – just prior to closing.
Beginning July 1, 2019 House Bill 447, which modified Section 125.56 of the Florida Statutes, will allow local governments to close an open or expired permit six years after its issuance, as long as there are no safety hazards. This will allow buyers and sellers to resolve open and expired permit issues much faster and minimize delays to closing.
Additionally, the bill also allows local governments to send written notice to an owner, as well as the contractor listed on their permit, when a building permit is about to expire. This mechanism will hopefully provide a reminder to contractors and property owners who may have simply forgotten to schedule an inspection or file the necessary paperwork, to get a permit closed out. The bill also aims to prevent local governments from penalizing property owners for open permits or expired permits applied for (and then neglected) by a previous owner. This will hopefully incentivize property owners to clean up any permit issues on their property without fear of fines or penalties for the delays, thereby benefiting sellers that may have inherited an open or expired permit at the time of closing.
Ultimately, a buyer should always insist on an permit search during the due diligence period, and ensure that any open and expired permits are closed out prior to the transfer of ownership. A seller can rely on this updated legislation to help facilitate the process without fear of unwarranted fines or penalties. If you have any questions about how open permits, expired permits, or the new legislation could impact your closing, contact your local real estate attorney.
Berlin Patten Ebling, PLLC
Article Authored by Natasha Selvaraj, Esq. email@example.com
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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